When a friend of mine called me recently and said, “If I could get an unreasonably high price for my house right now, I would sell!” I laughed at first, but then realized how the Lane County real estate market looks to most people—it is crazy!
Understanding the State in Real Estate
Consider the inventory of homes for sale. At the end of the first quarter in 2017, the number of homes for sale in Eugene-Springfield was down 25.7 percent from the first quarter of 2016. The average price of homes for sale was $349,000 for the first quarter and the average home sale price was $249,000. In short, we have fewer homes for sale and the majority of these homes is not at an accessible price for most buyers. This restricted inventory causes a frenzy of activity in the lower-end market.
However, a “crazy market” has somehow been translated into being a “great market” because this is an ideal market for some homeowners at some price points. For example, today’s sellers with homes valued under $300,000 often see multiple offers and sale prices above the list price. In this same marketplace, there are sellers with homes valued above $500,000 who are not enjoying as robust activity. When deciding your selling strategy, relying upon broad-brush market trends for timing and price is unwise.
A classic cartoon periodically circulates among us industry junkies that illustrates the same home as seen through the eyes of different parties: the tax assessor sees a mansion; the buyer sees a shanty; the appraiser sees a marginal at best; and to the seller, it is a one-of-a-kind treasure. Like all great humor, this is funny because there is some level of truth behind it.
What Home Sellers’ Should Expect
Today’s market will breed unrealistic expectations. In order to be successful, sellers must approach the market recognizing that it does not matter what they perceive to be the value of the real estate, regardless of their improvements on the home, what they paid for the home, or what they need to get from the home in order to take their next step. The value of the home is merely what a buyer today is willing to pay for it in today’s market.
To understand what the market will bear, do not depend on the broad generalities. Get wise counsel specific to your price point, geographical area and amenities of the home. I caution you against making significant financial decisions on your home based upon today’s “crazy” real estate market.